Daewoo Shipbuilding and Marine Engineering has won a major submarine sale deal with Indonesia thanks to its close relationship with Jakarta. Pictured is an Indonesian submarine that Daewoo has upgraded and the type adopted in the deal is bigger and more advanced.

/ Courtesy of Daewoo Shipbuilding and Marine Engineering

By Oh Young-jin

Korea has won a $1.12 billion deal to supply three submarines to Indonesia, officials of the Defense Ministry and Daewoo Shipbuilding and Marine Engineering said Tuesday.

“This is a contract that may lead to more orders from Indonesia and Malaysia,” said an official from the shipbuilder, which will fulfill the order, declining to comment on eventual sales in the region.

The agreement is the single biggest arms sales deal by a Korean firm and marks the first export of submarines. It is composed of three 1,400-ton class diesel-powered submarines, each 61.3 meters from stern to bow to be manned by a crew of 40. They are capable of launching torpedoes and other guided weaponry through eight tubes.

Delivery is to be completed by 2018, Daewoo and ministry officials said.

Daewoo officials said that the submarines to be delivered to Indonesia will be Korea’s original model. In 1988 Korea received building technologies for a 1,200-ton class German submarine.

Daewoo officials said that submarine builders from France, Germany and Russia also competed for the Indonesian deal but the Korean company owes its victory to better training, offset and logistics programs.

Korea and Indonesia are seen as close partners in arms sales. Daewoo was involved in providing upgrade programs for Indonesian submarines in 2008 and 2009.

“The Indonesian deal is an indication of our superiority in submarine building that should be viewed at the same level of traditional builders,” the company’s CEO Nam Sang-tae was quoted as saying in a news release. “It also secures our place in acquiring future deals in the region.”

With the Indonesian deal included, Daewoo has won orders to build 52 ships, worth $14.8 billion, which is 35 percent more than its target for this year, the Daeoo official said.